Jamaica’s development tipping point

Stakeholders had high hopes for Downtown Jamaica when the city rezoned 368 blocks in 2007.

The Queens neighborhood had all the makings of a real-estate hotbed at the time: great transportation, retail infrastructure and cultural institutions. It had been largely left behind as other parts of the city gentrified and prospered, and planners thought the 2007 rezoning would finally provide a springboard to boost the neighborhood’s fortunes.

Then came the financial crisis. Southeast Queens became the city’s epicenter for foreclosures, and grand schemes were put on hold.

Yet now developers, including big-time Manhattan players like the Chetrit Group and United American Land, are showing increasing interest in the area. And sources say a few mega-projects in the pipeline may prove to be the real estate tipping point for Jamaica.

“We have received a great deal of interest recently,” said Carlisle Towery, president of the nonprofit Greater Jamaica Development Corporation, which owns a large property portfolio in the area, some of which it’s selling off to developers who have large projects planned.

The real estate market is also starting to heat up in other corners of the neighborhood. In September, Flushing-based developer Chris Jia Shu Xu closed on the purchase of a $22 million site at the corner of Guy R. Brewer Boulevard and Archer Avenue, with roughly 720,000 buildable square feet. The price works out to about $30 per buildable foot. While that’s a far cry from the $200 to $250 per square foot that developers are paying in places like Long Island City, brokers in the area say prices are on the rise.

“Land prices are cheap compared to most of Downtown Brooklyn. They’re cheap compared to Long Island City,” said CPEX Real Estate’s Sean Kelly, who has a listing for a development site in a prime area near the Long Island Rail Road station for $24 million, or roughly $55 to $65 per foot.

“I think that as land prices increase in Brooklyn and the primer parts of Queens, we’ll see them continue to rise here,” he added.

Below is a look some of the projects on Jamaica’s drawing board:

A rendering of the Crossing at Jamaica Station

1. The Crossing at Jamaica Station

Midtown-based BRP Development announced plans early last year to build a $225 million, mixed-use building across the street from the Long Island Rail Road station, which will be the largest-ever private investment in the neighborhood.

The double-towered, 730,000-square-foot building will rise on a swath of nearly a dozen properties assembled over several years by the GJDC. The sale to BRP is expected to close this quarter.

The project, slated for completion in mid-2017, will include 584 market-rate and affordable rental units spread over a pair of 15-story and 25-story towers. The taller building will include three stories of retail spanning 80,000 square feet.

BRP said it’s looking at rents in the mid-$30s per square foot, which would put the monthly rent for a 750-square-foot one bedroom at about $2,188. By comparison, the median asking rent in the neighborhood is $1,695, according to the real estate data website StreetEasy.

Duane Reade currently occupies the corner retail at the site and sources say the project’s stakeholders are discussing ways to bring the pharmacy back once construction is complete. BRP said it’s targeting other retail tenants, such as restaurants, grocery stores, banks, apparel- and home-goods providers.

2. Hilton Garden Inn

On the southern end of the LIRR tracks, New Jersey-based Able Management plans to build a 28-story, four-star hotel on another plot of land assembled by the GJDC.

The two announced the land sale in mid-2013, but a legal spat with a partner who owned a stake in one of the properties held things up in the courts. Last month a judge ruled in favor of the GJDC, clearing the way for the nonprofit to sell the site to Able in the first half of this year. Able, which owns and operates hotels on Long Island, is planning a 125,000-square-foot tower with about 240 rooms, bars on the ground floor and roof, a pool and a restaurant.

The hotel will sit directly across from the AirTrain Station, which serves as a connection for passengers traveling between Manhattan and JFK Airport. Able CEO Viral Patel said room rates will range from $179 to $299 per night and that the hotel will be consistent with the other Hilton Garden Inns in the metro area.

3.Norman Towers

Queens-based developer the Bluestone Organization cut the ribbon late last year on a 100-unit, two-building rental project at 90-11 160th Street. Bluestone developed the $32 million affordable-housing project, which is now entirely leased up, with the help of nearly $14 million in city and state subsidies. All of the units in the project’s two buildings — which rose on a block-through site previously owned by the GJDC — are set aside as affordable housing in different pricing tiers. The building has few amenities, and one-bedrooms for tenants earning between roughly $52,000 and $108,000 rented for $1,450 through a city-run housing lottery. “The market in Jamaica for something like this is actually lower” than the most expensive units at Norman Towers, Bluestone partner Ira Lichtiger said. The project also includes about 5,700 square feet of ground-floor retail space. The building has two retail tenants — a restaurant and dentist’s office — and a third space is on the market. Retail rents on the side streets can range from $35 to $45 per square foot.

4. United American Land retail

Jamaica Avenue is the neighborhood’s main retail strip. In the mid-20th century, during its heyday, it was a bustling shopping destination, home to Macy’s, along with the now-defunct Gertz and Gimbels department stores.

Now the nearly mile-long strip is home to national retailers like the Gap, Old Navy and Applebee’s, as well as a mix of electronics and beauty-supply stores.

Major retailers are concentrated east of Parsons Boulevard — the last stop on the E, J and Z subway lines. That’s where Manhattan-based United American Land, headed by developer Al Laboz, paid $20.7 million to assemble a trio of properties in 2012 and 2104. The developer is now combining the three buildings into one and repositioning the properties into approximately 150,000 square feet of retail.

Laboz said Jamaica Avenue is similar to Fulton Street in Downtown Brooklyn, where the firm brought in tenants such as discount fashion stores H&M and T.J. Maxx.

“Queens is a strong borough and this is the strongest block in Queens in terms of retail,” Laboz said. “Tenants are always looking to get into urban markets, and this is a very strong urban market.”

5. Mary Immaculate Hospital conversion

The Chetrit Group has owned this nearly full-block-sized medical campus overlooking Rufus King Park, Jamaica’s largest green space, since 2009, when it acquired the defunct hospital following a bankruptcy auction.

The roughly 460,000 square feet of space is currently spread across a handful of buildings and a parking garage. The developer has filed plans to convert one of the buildings into a 324-unit residential development. But the project is something of a mystery, even to those steeped in the Jamaica real estate scene.

In late 2013, the city slapped the developer with a stop-work order for having a large pile of debris on the site during demolition and fined the firm $172,980 for other violations. The stop-work order was lifted in early 2014, but the company has yet to restart construction.

Chetrit, which did not respond to requests for comment, is currently involved in a number of high-profile properties around the city, including the conversion of the Sony Building at 550 Madison Avenue into luxury condos.

6. Moda

The Dermot Company was the first developer to bring luxury-style amenities to Jamaica when it opened the 346-unit Moda rental in 2010. The company, headed by William Dickey, had won the right to redevelop the former Queens Family Courthouse on Parsons Boulevard in 2005, through a public request for proposals.

Property records show the company paid $8 million for the plot.

Architecture firm FXFowle designed the 12-story, 400,000-square-foot building, which incorporated the Italian Renaissance-style facade of the courthouse and includes amenities like entertainment rooms, a fitness center, roof deck and concierge service.

The project is entirely leased up, with monthly rents ranging from $1,350 for a studio to $2,000 for a two-bedroom.

“To rent a comparable apartment in the higher-end neighborhoods of Brooklyn or Manhattan, residents would be paying two to three times as much,” Andrew Levison,
director of asset management and operations at Dermot, wrote in an email. “Our goal was to deliver a new Manhattan-quality building in
Jamaica at an affordable price point for the local residents and we think that goal was achieved.”

The building also has more than 50,000 square feet of retail space occupied by Associated Supermarket and the barbecue CityRib, one of the few restaurant/bars in
the neighborhood.

7. Retail mall

Blumenfeld Development Group, the company that built the massive East River Plaza mall in East Harlem, is bringing its retail game to Jamaica. The company is planning to develop a roughly 180,000-square-foot mall at 90-02 168th Street, a side street off Jamaica Avenue. The project, which will include an adjacent 550-plus-space parking garage, is slated to rise on a pair of GJDC-owned parking lots.

8. ACHS Management retail

Manhattan investors and developers Alex Adjmi and Bobby Cayre, known for their extensive New York City retail portfolio, are about three months away from completing a 50,000 square-foot strip mall at 168-50 Jamaica Avenue.

Planet Fitness and discount retailer Family Dollar have both already signed leases, and while the partnership declined to comment on rents, brokers said they can range from roughly $80 to $100 per square foot on Jamaica Avenue.

The partnership paid $2 million in 2008 for a handful of properties that make up the site. The location is toward the far eastern end of the neighborhood’s shopping area, but it could get a boost if Blumenfeld’s retail mall brings more foot traffic that way. TRD